The Employer of Record :How Employer of Record works

April 16, 2022
HR Payroll Bangladesh
EOR

The Employer of Record: How Employer of Record Works

An Employer of Record (EOR) serves as the “go-between” between the employee and the client company. It is particularly important when the latter expands into a country where it does not already have a presence.

The best way to explain the meaning of Employer of Record is to use a relatable example.

Think about jobs you’ve held in the past…

It’s time to get down to business after accepting the offer…

You begin the process of filling out the necessary employment paperwork.
In order to get paid, you need to get paid.
Taxes must be deducted where applicable.
It is likely that you will need employee benefits, such as health insurance
As well as verifying and recording all required work permit

Essentially, an Employer of Record serves as an intermediary between the employee and the client company when the latter expands into a new country.

Why or when would a company use Employer of Record services?

In global expansion, an EOR is often used when a company wants to conduct business without setting up its own physical presence in a foreign country.

It can be expensive and difficult to register a local business entity. A project or new business venture may require the company to move quickly. Short-term solutions may be all that’s needed.

How Does an EOR differ from a Global Employment Organization?

Your remote employees in the host country will see the EOR as their legal employer. EORs are often part of a larger Global Employment Outsourcing (GEO) strategy. A GEO is a service that assists businesses of any size in mobilizing their personnel in another country. The GEO will abide by all labor regulations, taxes, and work licenses in the country and locally. They might also employ an EOR to handle the workforce payroll.

As a result, hiring personnel in that country through a global Employer of Record can be a cost-effective option. The EOR will be governed by a legal body that will handle local payroll and employment tasks.

What Are the Advantages of Using a Record-keeping Employer?

Using a record-keeping employer, such as a professional employer organization (PEO) or a payroll service provider, can offer several advantages for businesses. Here are some key benefits:

Compliance with employment laws: Record-keeping employers stay up-to-date with ever-changing employment laws and regulations.
Accurate payroll processing: Record-keeping employers specialize in payroll management. They handle payroll processing, including calculating wages, deductions, and taxes.
Time savings: Outsourcing record-keeping tasks saves valuable time for business owners and HR personnel. By delegating responsibilities like payroll processing, tax filings, and maintaining employee records, you can focus on core business activities, strategic planning, and growth initiatives.
Expertise and knowledge: Record-keeping employers have expertise in payroll and HR matters. They stay updated on the latest industry trends, regulations, and best practices.
Access to technology and software: Record-keeping employers often use advanced payroll and HR management software. These tools can streamline processes, automate calculations, generate reports, and provide self-service portals for employees.
Employee benefits administration: Many record-keeping employers offer employee benefits administration as part of their services. They can handle tasks such as enrollment, eligibility verification, and coordination with benefit providers.
Risk management and insurance: Some record-keeping employers offer risk management services, including workers’ compensation coverage and safety programs.

What factors should I consider while selecting an Employer of Record?

Selecting an Employer of Record (EOR) is a significant decision that requires careful consideration. The EOR will serve as the legal employer of your staff, handling payroll, compliance, and other employment-related responsibilities. Here are some essential factors to consider when selecting an Employer of Record:

Expertise and experience: Evaluate the EOR’s expertise and experience in the industry. Consider how long they have been in business, their track record, and their reputation.
Global coverage and compliance: If you operate in multiple countries or plan to expand internationally, ensure that the EOR has a global presence and can provide coverage in the desired locations.
Services offered: Assess the range of services provided by the EOR. In addition to payroll processing and tax compliance, consider if they offer services like onboarding and offboarding employees, benefits administration, risk management, HR support, and assistance with visa and work permit processing, if applicable.
Technology and reporting capabilities: Review the EOR’s technology infrastructure and reporting capabilities. Ensure they have robust payroll and HR systems that can integrate with your existing processes, provide accurate and timely reporting, and offer employee self-service options.
Compliance and risk management: Compliance with local labor laws and regulations is crucial. Assess the EOR’s commitment to compliance, risk management practices, and their ability to adapt to changing regulations.

PayrollBD’s Employer of Record can help you simplify your global business expansion.

PayrollBD can assist you in extending your business operations overseas. Working side by side with clients, we can create an integrated outsourced global employment organization.

Our Employer of Record services include a variety of elements that can be tailored to your specific need. Outsourcing payroll management, assuring compliance with labor laws, tax filing, and work visa sponsorships are just a few of our main services.

We are a genuinely global company that takes a local approach to employee innovation. We don’t only work in the countries where we do business; we call them home.